Abt Railway Ministerial Corporation Financial Statements

Abt Railway Ministerial Corporation

Financial Statements

FOR THE YEAR ENDED 30 JUNE 2004

Contents

Abt Railway Ministerial Corporation Financial Statements
Statement of Financial Performance
Statement of Financial Position
Statement of Cash Flows
Notes to and forming part of the Financial Statements
Certification of Financial Statements
Audit Report

ABT RAILWAY MINISTERIAL CORPORATION
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2004

		2004	2003
	Note	$’000	$’000
Revenue from ordinary activities
Revenue from Government	3.2	4,000	0
Commonwealth grants	3.1	0	50
User Charges	3.4	124	0
Other revenue from ordinary activities	3.3	0	5
Correction of Fundamental Error	3.5	5,915	0
Total revenue from ordinary activities		10,039	55

Expenses from ordinary activities (excluding borrowing costs)
Depreciation	4.1	822	179
Other expenses from ordinary activities	4.2	1,419	17
Correction of Fundamental Error	3.5	1,132	0
Loss on Revaluation	4.3	3,465	0
Total expenses from ordinary activities (excluding borrowing costs)		6,838	196

Net operating surplus (deficit) from ordinary activities		3,201	-141

Equity interests
Net surplus (deficit) attributable to the State		3,201	-141

Total changes in equity other than those resulting from transactions with Tasmanian State Government in its capacity as owner		3,201	-141

The financial statements of the Abt Railway Ministerial Corporation are special purpose financial statements and should be read in conjunction with the accompanying notes.

ABT RAILWAY MINISTERIAL CORPORATION
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2004

		2004	2003
	Note	$’000	$’000
ASSETS
Current Assets
Cash on hand and deposit accounts	8a	430	13
Receivables	5.3	124	0
Accrued Revenue	5.4	67	0
Total Current Assets		621	13
Non-Current Assets
Land	5.1	1,399	977
Buildings	5.1	2,778	2,549
Plant, equipment and vehicles	5.1	6,170	2,690
Infrastructure	5.1	23,865	21,705
Total Non-Current Assets		34,212	27,921
TOTAL ASSETS		34,833	27,934

LIABILITIES
Current Liabilities
Payables	6.1	2	0
Tax Liabilities	6.2	11	0
Total Current Liabilities		13	0
TOTAL LIABILITIES		13	0
Net Assets (Liabilities)		34,820	27,934

EQUITY
Accumulated surplus (deficit)		31,135	27,934
Revaluation Reserve		3,685	0
TOTAL EQUITY	7	34,820	27,934

The financial statements of the Abt Railway Ministerial Corporation are special purpose financial statements and should be read in conjunction with the accompanying notes.

ABT RAILWAY MINISTERIAL CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2004

		2004	2003
	Note	$’000	$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Inflows
Revenue from Government		4,000	0
Commonwealth Grants		0	50
Other revenue from ordinary activities		0	5
Correction of Fundamental Error		5,859	0
Total Cash Inflows		9,859	55
Other cash payments		-1,417	-18
Correction of Fundamental Error		-1,132	0
Total Cash Outflows		-2,549	-18

NET CASH FROM (USED BY) OPERATING ACTIVITIES		7,310	37

CASH FLOWS FROM INVESTING ACTIVITIES
Cash Outflows
Payments for acquisition of assets		-3,098	-356
Correction of Fundamental Error		-3,795	0
Total Cash Outflows		-6,893	-356

NET CASH FROM (USED BY) INVESTING ACTIVITIES		417	-356

Net increase (decrease) in cash held		417	-319

Cash at the beginning of the reporting period		13	332
CASH AT THE END OF THE REPORTING PERIOD	8a	430	13

The financial statements of the Abt Railway Ministerial Corporation are special purpose financial statements and should be read in conjunction with the accompanying notes.

ABT RAILWAY MINISTERIAL CORPORATION
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2004
1. OBJECTIVES AND FUNDING
The Abt Railway Ministerial Corporation objectives, under Section 6 of the Abt Railway Development Act 1999, are to arrange for any necessary approval to undertake the railway development; to construct or arrange for the construction of the railway development; to arrange for a person to operate the railway development and to facilitate associated developments in the vicinity of the railway.

The Abt Railway Steering Committee was established at the commencement of the project to coordinate input from a number of departments. Specific responsibility for administration of the main siteworks construction contract, the locomotive restoration contract and the construction management contract, lies with the Department of Infrastructure, Energy and Resources.

The Abt Railway Ministerial Corporation is funded by the Federal Government, through Centenary of Federation funding and the State Government. The financial report encompasses all funds through which the Abt Railway Ministerial Corporation controls resources to carry on its functions.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Abt Railway Development Act 1999 was enacted to authorise the construction, maintenance and operation of a railway between Queenstown and Strahan.

Under Section 5 of the Abt Railway Development Act 1999, the Abt Railway Ministerial Corporation was established.

The financial management and reporting obligations of Abt Railway Ministerial Corporation are governed by the Abt Railway Development Act 1999 and the Financial Management and Audit Act 1990 (FMAA). The financial statements for the reporting entity for the year ended 30 June 2004 have therefore been prepared in accordance with the requirements of the Abt Railway Development Act 1999 and the FMAA.

2.1. Basis of Accounting
The financial statements are special purpose financial statements that have been prepared on an accrual accounting basis and in accordance with applicable Australian Accounting Standards and other mandatory professional reporting requirements.

In the process of preparing accrual-based reports for the Abt Railway Ministerial Corporation as a single entity, all intra-entity transactions and balances have been eliminated.

The financial statements have been prepared on an historical cost basis and do not take into account changing money values, or unless otherwise stated, current valuations of non-current assets.

Non-current assets are revalued on a fair value basis and are not stated at values in excess of their recoverable amounts. Discounted cash flows are not used in determining recoverable amounts.

Assets and liabilities are recognised in the Abt Railway Ministerial Corporation’s Statement of Financial Position when it is probable that future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured.

Revenues and expenses are recognised in the Abt Railway Ministerial Corporation’s Statement of Financial Performance when the flow or consumption or loss of economic benefits has occurred and can be reliably measured.

These accounting policies have been consistently applied, except where otherwise stated.

2.2. Adoption of Australian Equivalents to International Financial Reporting Standards
The Corporation is managing the transition to Australian Equivalents to International Financial Reporting Standards (AIFRS) by analysing pending standards, Urgent Issues Group Abstracts and changes to Treasurer’s Instructions to identify key areas regarding policies, procedures, systems and financial impacts affected by the transition.

The Department of Treasury and Finance will take a key role in assisting the Corporation to manage the transition. Key strategies for managing the transition are:

analysis of AIFRS and the changes from the current AAS;
determining new AIFRS policies, including mandating policies where appropriate;
development of new or revised Treasurer’s Instructions, including mandatory accounting policies and model financial statements; and
providing information for agencies and encouraging attendance at training seminars
Once changes to accounting policies and standards have been identified, the Corporation will determine the extent of system impacts and will develop a strategy for implementing any necessary changes to financial systems. Strategies for training staff and informing stakeholders of major changes will then be implemented.

The Corporation’s accounting policies may also be affected by a proposed standard to harmonise accounting standards with Government Finance Statistics (GFS). This standard is likely to change the impact of AIFRS and significantly affect the presentation of the Statement of Financial Performance from the 2005-06 reporting year. However, the standard is yet to be finalised and the impact cannot be assessed with certainty until the standard is issued.

The Corporation has identified a number of significant differences in accounting policies that will arise from adopting AIFRS. Some differences arise because AIFRS requirements are different from existing AASB requirements. Other differences could arise from options in AIFRS.

Based on current information, the following key differences in accounting policies are expected to arise from adopting AIFRS:

AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards requires retrospective application of the new AIFRS from 1 July 2004, with limited exemptions. Similarly, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors requires voluntary changes in accounting policy and correction of errors to be accounted for retrospectively by restating comparatives and adjusting the opening balance of accumulated funds. This differs from current Australian requirements, because such changes must be recognised in the current period through profit or loss, unless a new standard mandates otherwise.
AASB 136 Impairment of Assets requires an entity to assess at each reporting date whether there is any indication that an asset is impaired and if such indication exists, the entity must estimate the recoverable amount. Impairment testing largely replicates the recoverable amount test in AASB1010 and AASB1041. However, the scope of impairment testing is wider in that it applies to all assets, rather than only non-current assets.
2.3. Revenues
Revenues are recognised in the Statement of Financial Performance when it is probable that the inflow or other enhancement or saving in outflows of future economic benefits has occurred and can be measured reliably.

(a) Revenues from Government

Revenues from Government whether recurrent or capital are recognised as revenues in the period in which the Corporation gains control of the funds. Control arises in the period of receipt by the Department of Infrastructure, Energy and Resources.

(b) Commonwealth Grants

Grants payable by the Commonwealth Government are recognised as revenue when the Corporation gains control of the underlying assets. Where grants are reciprocal, revenue is recognised as performance occurs under the grant. Non-reciprocal grants are recognised as revenue when the grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant.

Amounts earned in exchange for the provision of goods and services are recognised when the good or service is provided.

(d) Interest

Interest revenue is recognised as it accrues.

(e) Other Revenue

Revenue from sources other than those identified above is recognised when it is probable that the inflow or other enhancement or saving in outflow of future economic benefits has occurred and can be measured reliably.

(f) Correction of Fundamental Errors

Fundamental errors, which render past financial reports unreliable, are disclosed separately on the face of the Statement of Financial Performance. The nature of the error is disclosed in the notes, as well as the amount of the correction relating to prior periods including, where practicable, a restatement showing the information that would have been recognised had the error not been made.

2.4. Expenses
Expenses are recognised in the Statement of Financial Performance when it is probable that the consumption or loss of future economic benefits resulting in a reduction in assets and/or an increase in liabilities has occurred and the consumption or loss of future economic benefits can be measured reliably.

(a) Depreciation

Depreciation on non-current assets is calculated on the straight-line method at rates calculated to write off the cost or revalued amount of each asset during its effective useful life.

Major depreciation periods are:

Plant, equipment and vehicles 5 years
Buildings 40 years
Infrastructure 25 - 40 years

(b) Other Expenses From Ordinary Activities

Expenses from ordinary activities are recognised when it is probable that the consumption or loss of future economic benefits resulting in a reduction in assets and/or an increase in liabilities has occurred and the consumption or loss of future economic benefits can be measured reliably.

2.5. Assets
Assets are recognised in the Statement of Financial Position when it is probable that the future economic benefits embodied in the asset will eventuate and the asset possesses a cost or other value that can be measured reliably.

(a) Cash on Hand and Deposit Accounts

Cash means notes, coins and any deposits held at call with a bank or financial institution, as well as funds held in the Special Deposits and Trust Fund.

(b) Property, Plant, Equipment, Vehicles and Infrastructure

(i) Valuation basis
Valuation of assets is undertaken in accordance with the Department of Treasury and Finance publication “Guidelines for the Recording, Valuation and Reporting of Non-Current Physical Assets in Tasmanian Government Departments” are valued at their current value to the Corporation, determined by reference to the asset’s fair value.

(ii) Asset recognition threshold
In accordance with Treasurer’s Instructions, the Corporation has adopted an asset capitalisation threshold of $5,000. Assets with an historical cost greater than or equal to $5,000 are to be recognised as assets and depreciated. All assets valued at less than $5,000 are charged to the Statement of Financial Performance in the year of purchase.

(iii) Revaluations
Assets are grouped on the basis of having a similar nature or function in the operations of the Abt Railway Ministerial Corporation. During 2003-04 all asset classes were revalued.

2.6. Liabilities
Liabilities are recognised in the Statement of Financial Position when it is probable that the future sacrifice of economic benefits will be required and the amount of the liability can be measured reliably.

(a) Payables

Payables, including accruals not yet billed, are recognised when the Corporation becomes obliged to make future payments as a result of a purchase of assets or services.

(b) Other Current Liabilities

Other current liabilities are recognised in the Statement of Financial Position when it is probable that the future sacrifice of economic benefits will be required and the amount of the liability can be measured reliably.

2.7. Comparative Figures
Comparative figures have been adjusted to conform to changes in presentation in these financial statements where required.

2.8. Rounding
All amounts in the financial statements have been rounded to the nearest thousand dollars unless otherwise stated.

2.9. Taxation
The Abt Railway Ministerial Corporation is exempt from all forms of taxation except fringe benefits tax, payroll tax and the goods and services tax.
In the Statement of Cash Flows the GST component of cash flows arising from investing or financing activities which is recoverable from, or payable to, the Australian Taxation Office is, in accordance with the Australian Accounting Standards, classified as operating cash flows.

2.10. Leases
The Abt Railway Ministerial Corporation (lessor) entered into an accounting lease with Abt Railway Holdings Pty Ltd (lessee) on the 9th April 2002. The lease provides the lessee with the right to operate and maintain the land, buildings and other assets as detailed in the lease for an initial period of 20 years. There is an automatic right for extension by the lessee should the request be made within the stated timeframe where there is no breach of any of the terms of the lease. On 1 August 2002, the lease was assigned by Abt Railway Holdings Pty Ltd to AC N 097 627 677 Pty Ltd, a Federal Group controlled company, and operated under the West Coast Wilderness Railway.

3. REVENUE FROM ORDINARY ACTIVITIES

	2004	2003
	$'000	$'000
3.1 Commonwealth Grants
Specific grants	0	50
Total	0	50

3.2. Revenue From Government
From Economic and Social Infrastructure Fund	4,000	0
Total	4,000	0

3.3. Other Revenue From Ordinary Activities
Interest on investments	0	5
Total	0	5

3.4. User Charges
Lease Charges	124	0
Total	124	0

3.5. Correction of Fundamental Error

The administrative functions of the Corporation were transferred to the Department of Infrastructure, Energy and Resources (DIER) under the Administrative Arrangements Order No.2 of 2004. As a result, it was identified that revenue and expenses transacted through DIER in the 2002-03 financial year had not been accounted for in the Corporation’s financial statements. This would have resulted in the restatement of the Statement of Financial Performance, Financial Position and Cashflows for the year ended 30 June 2003 as detailed below.

STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2003

	2003
	$’000

Revenue from ordinary activities
Revenue from Government	5,859
Commonwealth grants	50
Other revenue from ordinary activities	62
Total revenue from ordinary activities	5,971

Expenses from ordinary activities (excluding borrowing costs)
Depreciation	179
Other expenses from ordinary activities	1,149
Total expenses from ordinary activities (excluding borrowing costs)	1,328
Net operating surplus (deficit) from ordinary activities	4,643

Equity interests
Net surplus (deficit) attributable to the State	4,643

Total changes in equity other than those resulting from transactions with Tasmanian State
Government in its capacity as owner	4,643

STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2003

	2003
	$’000
ASSETS
Current Assets
Cash on hand and deposit accounts	946
Accrued Revenue	57
Total Current Assets	1,003
Non-Current Assets
Land	977
Buildings	2,549
Plant, equipment and vehicles	2,690
Infrastructure	25,500
Total Non-Current Assets	31,716
TOTAL ASSETS	32,719

LIABILITIES
Current Liabilities
Payables	0
Other current liabilities	0
Total Current Liabilities	0
TOTAL LIABILITIES	0
Net Assets (Liabilities)	32,719

EQUITY
Accumulated surplus (deficit)	32,719
TOTAL EQUITY	32,719

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2003

	2003
	$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Inflows
Revenue from Government	5,859
Commonwealth grants	50
Interest received	5
Other cash receipts	0
Total Cash Inflows	5,914

Cash Outflows
Other cash payments	-1,149
Total Cash Outflows	-1,149
NET CASH FROM (USED BY) OPERATING ACTIVITIES	4,765

CASH FLOWS FROM INVESTING ACTIVITIES
Cash Outflows
Payments for acquisition of assets	-4,151
Total Cash Outflows	-4,151

NET CASH FROM (USED BY) INVESTING ACTIVITIES	614

Net increase (decrease) in cash held	614

Cash at the beginning of the reporting period	322
CASH AT THE END OF THE REPORTING PERIOD	946

4. EXPENSES FROM ORDINARY ACTIVITIES

	2004	2003
	$'000	$'000
4.1. Depreciation and Amortisation
Depreciation of property, plant, equipment and vehicles	822	179
Total	822	179
a) Depreciation expense for the reporting period was charged in respect of:
Plant, equipment and vehicles	109	29
Buildings	64	16
Infrastructure	649	134
Total	822	179

4.2. Other Expenses From Ordinary Activities	1,419	7
Other	1,419	7
Total

4.3. Loss on Revaluation
Revaluation as at 30 June 2004	3,465	0
Total	3,465	0

5. ASSETS

5.1. PROPERTY, PLANT, EQUIPMENT AND VEHICLES

Land
- At valuation	1,399	977
Total Land	1,399	977

Buildings
- At valuation	2,778	2,565
Less Accumulated Depreciation	0	-16
Total Buildings	2,778	2,549

Plant, equipment and vehicles
- At valuation	6,170	2,723
Less Accumulated Depreciation	0	-33
Total Plant, equipment and vehicles	6,170	2,690

Infrastructure
- At valuation	23,865	21,839
Less Accumulated Depreciation	0	-134
Total Infrastructure	23,865	21,705

Total	34,212	27,921

5.2. RECONCILIATION OF NON-CURRENT PHYSICAL ASSETS
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning of the current and previous financial year are set out below.

2004	Land	Buildings	Plant Equipment & Vehicles	Infrastructure	Total
	$’000	$’000	$’000	$’000	$’000
Carrying amount at start of year	977	2,549	2,761	25,429	31,716
Additions	0	133	415	2,550	3,098
Disposals	0	0	0	0	0
Revaluation increments/(decrements)	422	160	3,103	-3,465	220
Depreciation expense	0	-64	-109	-649	-822

Carrying amount at end of year	1,399	2,778	6,170	23,865	34,212

2003	Land	Buildings	Plant Equipment & Vehicles	Infrastructure	Total
	$’000	$’000	$’000	$’000	$’000
Carrying amount at start of year
Additions	8	0	47	301	356
Disposals	0	0	0	0	0
Revaluation increments/(decrements)	0	0	0	0	0
Depreciation expense	0	-16	-29	-134	-179

Carrying amount at end of year	977	2,549	2,690	21,705	27,921

2003 reconciliation after correction of fundamental error	Land	Buildings	Plant Equipment & Vehicles	Infrastructure	Total
	$’000	$’000	$’000	$’000	$’000

Carrying amount at start of year	969	2,565	2,672	21,538	27,744
Additions	8	0	118	4,025	4,151
Disposals	0	0	0	0	0
Revaluation increments/(decrements)	0	0	0	0	0
Depreciation expense	0	-16	-29	-134	-179

Carrying amount at end of year	977	2,549	2,761	25,429	31,716

	2004	2003
	$'000	$'000
5.3. Receivables
Debtors	124	0
Total	124	0

5.4. Accrued Revenue
Lease Charges	67	0
Total	67	0

6. LIABILITIES

	2004	2003
	$'000	$'000
6.1. Payables
Sundry Creditors	2	0
Total	2	0

6.2. Tax Liabilities
Goods & Services Tax Payable	11	0
Total	11	0

7. EQUITY AND RESERVES

Equity	Accumulated Results		Asset Revaluation		Reserve Total Equity
	2004	2003	2004	2003	2004	2003

	$’000	$’000	$’000	$’000	$’000	$’000

Balance at 1 July	27,934	28,075	0	0	27,934	28,075

Net surplus/(deficit)	3,201	-141	3,685	0	6,886	-141

Balance at 30 June	31,135	27,934	3,685	0	34,820	27,934

8. CASHFLOW RECONCILIATION

	2004	2003
	$’000	$’000
(a) Reconciliation of cash per Statement of Financial Position to Statement of Cash Flows

Treasury trust accounts	430	13
Cash on hand and at bank	0	0

Cash at year end and per Statement of Cash Flows	430	13

(b) Reconciliation of operating surplus to net cash provided by operating activities

Net surplus/(deficit)	3,201	-141

(Increase)/decrease in receivables	-124	0
(Increase)/decrease in accrued revenue	-67	0
Increase/(decrease) in payables	2	-1
Increase/(decrease) in tax liabilities	11	0
Depreciation	822	179
Loss on revaluation	3,465	0

Net cash provided/(used) by operating activities	7,310	37

Certification of Financial Statements

The accompanying Financial Statements of the Abt Railway Ministerial Corporation have been prepared in compliance with the provision of the Abt Railway Development Act 1999 and the Financial Management Audit Act 1990 from proper accounts and records to present fairly the financial transactions for the year ended 30 June 2004 and the financial position as at 30 June 2004.

At the date of signing I am not aware of any circumstances which would render the particulars included in the financial statements misleading or inaccurate.

Dated this 16th day of August 2004

Mark Addis
SECRETARY
DEPARTMENT OF INFRASTRUCTURE, ENERGY AND RESOURCES

Abt Railway Ministerial Corporation
Audit Report

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